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Estée Lauder Has Completed the Acquisition of Too Faced

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Dec. 29 2016, Updated 7:37 a.m. ET

Price movement

Estée Lauder (EL) rose 3.0% to close at $78.38 per share during the third week of December 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 3.0%, 1.2%, and -9.7%, respectively, as of December 23.

EL is trading 0.73% above its 20-day moving average, 2.5% below its 50-day moving average, and 11.6% below its 200-day moving average.

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Related ETF and peers

The iShares Russell 3000 (IWV) invests 0.09% of its holdings in Estée Lauder. The YTD price movement of IWV was 13.8% on December 23.

The market caps of Estée Lauder’s competitors are as follows:

  • Coty (COTY): $13.7 billion
  • Coach (COH): $9.9 billion
  • Avon Products (AVP): $2.3 billion

Latest news on Estée Lauder

On December 19, 2016, Estée Lauder completed its acquisition of Too Faced, a cosmetics brand. The acquisition will add makeup products to the company’s portfolio and help expand its consumer base.

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Estée Lauder’s performance in fiscal 1Q17

Estée Lauder (EL) reported fiscal 1Q17 net sales of $2.9 billion, a YoY (year-over-year) rise of 1.1% compared to $2.8 billion in fiscal 1Q16. Sales of Fragrance and Hair Care products rose 7.0% and 1.5%, respectively, and sales of Skin Care products fell 0.63% YoY in fiscal 1Q17.

The company’s gross profit margin and operating margin narrowed 40 basis points and 140 basis points, respectively, YoY in fiscal 1Q17.

Its net income and EPS (earnings per share) fell to $294 million and $0.79, respectively, in fiscal 1Q17 compared to $309 million and $0.82, respectively, in fiscal 1Q16.

Estée Lauder’s cash and cash equivalents fell 27.4% YoY, and its inventory and promotional merchandise rose 2.5% YoY in fiscal 1Q17.

Projections

Estée Lauder (EL) has made the following projections for fiscal 2017:

  • net sales growth of 6.0%–7.0%
  • reported EPS of $3.20–$3.30
  • charges associated with restructuring charges of $80.0 million–$100.0 million
  • EPS before charges associated with restructuring activities of $3.38–$3.44

The company has made the following projections for fiscal 2Q17:

  • net sales growth of 3.0%–4.0% and 5.0%–6.0% on a constant currency basis
  • reported EPS of $1.03–$1.10
  • restructuring charges of $30.0 million–$40.0 million
  • EPS before charges associated with restructuring activities of $1.10–$1.15

Next, we’ll take a look at Constellation Brands (STZ).

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